Amid falling interest rates and rate expectations, outflows from retail loan funds persisted for the seventh straight month in October. All told, loan mutual funds’ assets under management dropped by $5.9 billion – eclipsing September’s short-lived record decline of $5.6 billion – to a 14-month low of $152.2 billion, according to data from Lipper and fund filings. In all, loan-fund AUM contracted by $13.6 billion, or 8.2%, during the first 10 months of 2014. What’s more, AUM is off $22.9 billion, or 13.1%, since reaching an all-time high of $175.1 billion in March.
As this chart illustrates, however, 2014’s declines follow a period of hyper-growth for the category. Indeed, loan mutual fund AUM remains 659% higher than its post-credit-crunch low of $20.1 billion, from year-end 2008, and far above the pre-crisis high of $46.7 billion, from year-end 2006.
- 10-Year Treasury Yield